Today, I’ve go a special message from Tom at Prosper Lending Review. He’s trying to raise awareness for a great cause and needs your vote by 5PM CST today. If you can help vote and spread the word, I’d greatly appreciate it.
Inspired by extreme poverty in Bangladesh, Muhammad Yunus pioneered the concept of microcredit three decades ago. Microcredit is built upon the belief that people living in poverty have skills which are under-utilized. Without access to capital, these poor are often in bonded labor to usurious or unscrupulous masters and unable to break this cycle for generations. Unfortunately charity, despite its good intentions, can create a dependency which allows poverty to continue. Microcredit, on the other hand, matches resources to initiative, hard work and talent to allow the poor to raise their standard of living in a sustainable way. In 2006 Muhammad Yunus was awarded the Nobel Peace Prize for this work. Since its inception in Bangladesh in 1978, Microcredit has reached over 100 million of the world’s poor through more than 3,000 organizations
As lenders seek to lend money they are faced with a bewildering variety of microcredit institutions. A lender may want to focus his efforts on a specific country. Or he may want to concentrate on female borrowers or only the most destitute. He might want to give money to the organization as a tax-deductible contribution or he may require his capital be repaid over time with interest. A lender may especially be interested in avoiding usurious microcredit organizations who exploit unwitting borrowers under a ruse of generosity. Navigating the maze of microcredit is not easy.
The challenge is compounded because the microcredit organizations, quite appropriately, have their efforts focused on improving the lot of the borrower. This typically means they are headquartered in remote areas to be near their borrowers instead of in developed countries where it is more likely potential investors reside. Limited internet communication coupled with frequent language barriers creates situations where microcredit organizations do not adequately convey their mission and efforts to potential investors and, as a result, miss millions of dollars in potential funding.
As a graduate student at George Washington University, I am working with a small team to create a web-based information system to solve this challenge. We will bring transparency, visibility, fundraising options and increased social interaction to the microcredit industry. We passionately believe the additional capital achieved through information transparency will help microcredit organizations reduce poverty, empower women, improve nutrition, educate children and encouraging self-reliance throughout the developing world.
Our group recently entered this project in the Dell Social Innovation Challenge. In order to be selected from among over 500 ideas as a semifinalist we must score a couple hundred more votes by 5PM CST. You can easily help by registering and voting here.